www.amurminerals.com
Amur Minerals Corporation (AMC) is a rapidly-growing mineral resource exploration and development company focused on base metal projects located in the far east of Russia. The Company has three properties in the region with its principal asset being the Kun-Manie sulphide nickel, copper project located in Amur Oblast. With a JORC compliant resource of over a quarter of a million tons of contained nickel, Kun-Manie is one of the five largest new nickel sulphide discoveries since Voisey’s Bay.
Amur Minerals may be developing rare district scale nickel project, says Edison
Russia focused Amur Minerals (LON:AMC) may be looking at developing a "district scale" nickel project, rather than three deposits, says research house Edison.
Recent exploration results from the Kun-Manie nickel sulphide project, the firm's main asset, point to this, said analyst Charles Gibson, who added that such a district was "incredibly rare".
"Although Amur’s licence area is not known to contain massive nickel sulphide, the extent of pervasive lower grade nickel mineralisation at surface lends itself to numerous shallow open pits being mined and, in all likelihood, a call for a new and improved revised feasibility study being completed," he said.
In November, Amur reported results from the first phase of its 2011 exploration programme at Kun-Manie, saying there was "substantial" potential to expand resources.
Extensive soil sampling programme had expanded the known drill targets and defined many others, the company had told investors.
Gibson pointed out that only one final state approval for a mining licence for the project was required and it had enough cash for 2012 drilling.
Its equity swap agreement with Lanstead, for which it closed early settlement last May, continues to pay Amur around £102,000 per month (pegged to Amur’s share price movements), and with cash at hand of around US$4.2mln as of this month, Amur is funded through its 2012 field season, said the analyst.
Gibson said updating Edison's model using a nickel price of US$20,000 per tonne adjusted its estimate of the value of the project to US$394 million or £0.88 per share before dilution.
"Amur’s share price is therefore at a 90 per cent discount to the potential value of the project," said Gibson.
He added that while there was a risk the mining licence was not granted, if the deposit were ever to be exploited by a third party, the company has the right to compensation equal to 140 per cent of its exploration expenditure.
